CRUDE OIL EXPORT OF GHANA AND ITS IMPACT ON THE ECONOMY

Abstract

The aim of the paper is to illustrate the impact of crude oil commercial production and export launch in Ghana on the country’s economy. The study is conducted based on one factor variance analysis and Tukey’s Honest Significant Difference test. Analysis is related to the Dutch disease paradox. Ghana constitutes an eminent and interesting example of a natural resource-rich country, where oil commercial production started late, in 2011. Monetary policy in Ghana seems to be effective in mitigating the effects of the Dutch disease. Research results imply that the Ghanaian Cedi depreciated rather than appreciated since crude oil export’s launch. Moreover, it is shown that the increase in oil export has not had a significant impact on the export of non-fuel goods. Additionally, the study shows that the launch of oil commercial production was associated with a contraction of agricultural value added. The rise in oil export led to a significant decrease of the rural population share in the total population. The agriculture sector, however, provides the main livelihood for many people in Ghana and the revenue generated in the sector plays an important role in the country’s development. The Ghanaian government should be especially concerned about issues related to agricultural modernisation and education in rural communities.